Wind energy's tax break still spins in debate

Turbines work near Tiskilwa, Ill. The president wants an extension of a wind energy tax credit.

Turbines work near Tiskilwa, Ill. The president wants an extension...

WASHINGTON - Wind energy advocates on Wednesday pleaded with Congress to renew a tax break they credit with sending turbines spinning across the U.S., amid opposition from critics who insist the industry no longer needs the help.

The diverse views were delivered during a House Oversight subcommittee hearing on the production tax credit, which allows project owners to reduce tax bills by 2.3 cents for every kilowatt-hour of electricity they produce over a 10-year period.

Unless Congress renews the 21-year-old production tax credit, the incentive will be limited to renewable energy projects that start construction before Dec. 31, 2013. President Barack Obama has asked Congress to permanently extend the tax credit at a price tag of $24.7 billion over 10 years.

Even though the credit has temporarily lapsed at least four times, it has encouraged investment in wind farms, helping to diversify the nation's energy portfolio and drive down power costs, said Rob Gramlich, a vice president at the American Wind Energy Association.

The significant growth in wind power - which represented the largest source of new generation capacity last year - proves that it is no longer an infant industry, he said. Renewable power mandates in many states already ensure demand for wind power, he added.

But there's another option, said Dan Reicher, director of Stanford University's Steyer-Taylor Center for Energy Policy and Finance.

Reicher said the best option is to slowly phase out the production tax credit while giving renewable power projects the ability to qualify for master limited partnerships and real estate investment trusts that offer unique tax treatment.